The UK's competition watchdog has given the green light to Associated British Foods' (ABF) acquisition of bread rival Hovis, paving the way for the creation of a bakery giant that will control a significant share of the British bread market.
Deal Cleared After In-Depth Investigation
The Competition and Markets Authority (CMA) announced on Tuesday that it had cleared the deal following a detailed Phase 2 investigation. The regulator concluded that the merger would not substantially lessen competition in the UK bread market.
ABF, which owns the Kingsmill brand, agreed to acquire Hovis from its private equity owner, Endless, in a deal worth around £250 million. The takeover was first announced in February and immediately referred for a Phase 1 review by the CMA.
Concerns Addressed
The CMA raised initial concerns that the merger could lead to higher prices for consumers and reduced choice. However, after a thorough analysis, the watchdog found that the combined entity would still face sufficient competition from other major players such as Warburtons, as well as supermarket own-label brands.
As part of the clearance, ABF has agreed to divest a small number of Hovis distribution depots to address specific local competition concerns. The company will also be required to maintain supplies to certain customers for a limited period.
Impact on Jobs and Supply Chain
The deal secures the future of Hovis, which employs around 2,500 people across eight bakeries and 30 distribution depots. ABF has committed to maintaining Hovis's manufacturing sites and supporting its supply chain.
Industry analysts say the takeover will create a more efficient bakery business, allowing ABF to streamline operations and invest in new products. The combined company will have a strong position in the wrapped bread and bakery snacks markets.
Reaction from Stakeholders
ABF chief executive George Weston welcomed the CMA's decision, saying the acquisition would bring together two iconic British brands and create a stronger, more sustainable business. Hovis chairman Paul Baker said the deal provided certainty for employees and suppliers.
However, some consumer groups expressed disappointment, arguing that the merger reduces competition in an already concentrated market. They called for the CMA to remain vigilant against potential price rises.
The clearance marks the end of a turbulent period for Hovis, which has changed hands several times in recent years. The company was previously owned by Premier Foods and later by private equity firm Endless, which had been seeking a buyer since 2024.
